Australian businesses are continuing to operate in Myanmar’s mining sector despite risks they are propping up the country’s brutal military dictatorship, leading to renewed calls on the Albanese government to crack down on the practice.
Democracy activists have for the first time uncovered the “alarming” scale of Australian investment in Myanmar’s mining sector and are demanding the Commonwealth follow its closest international allies by imposing widespread sanctions against the military and its conglomerates.
Corporate and other records uncovered by the NGO, Justice for Myanmar, suggest at least 10 firms with Australian ties – including ASX-listed Australian Laboratory Services – have maintained operations in Myanmar since its armed forces, known as the Tatmadaw, staged a coup against the democratically elected government and its leader Aung San Suu Kyi on February 1, 2021.
“The Myanmar military operates as a cartel that is stealing the wealth of the people of Myanmar on a massive scale to fund its war of terror and enrich war criminals,” said Yadanar Maung, a spokeswoman for Justice for Myanmar.
“Yet, there are Australian companies, executives and investors in the mining sector that are continuing business as usual, financing the illegitimate junta and helping to keep a corrupt and destructive mining sector open for business. Australia needs to act now to impose sanctions on the junta, its businesses and cronies, and stop Australians from directly and indirectly providing funds and other forms of support to the junta.”
Access to company filings and documents in Myanmar is restricted under the current military rule. But by trawling through company annual reports, leaked tax filings and documents from junta ministries and other open-source materials, Justice for Myanmar has unearthed a sprawling network of Australian companies that still have a presence in the troubled mining sector in a report titled “Mines against humanity”.
Myanmar is a frequent international business pariah, due to its history of sanctions and oppressive military rule. Yet, it is also a land of economic promise.
World-class mineral resources including copper, gold, lead, zinc, silver and coal, as well as precious stones such as jades and rubies, have been effectively untapped, making it an ideal location for international prospectors and explorers.
When the Suu Kyi government began easing restrictions on exploration permits after the 2015 general election, the first openly contested poll held in the country in 25 years, the Australian Trade and Investment Commission and Australia’s then-Ambassador to Myanmar, Andrew Faulkner, hosted a workshop to promote “the enormous mining potential” in the country.
By September 2020, Australian investment in Myanmar was world-leading – 39 per cent of international permits, or 11, had gone to Australia, surpassing China (36 per cent), Thailand (11 per cent), Japan (7 per cent) Vietnam (4 per cent) and the United Kingdom (3 per cent).
One of those companies to eventually be granted a licence was PanAust, an Australian-incorporated copper and gold mining producer headquartered in Brisbane.
In its 2021 Business Review and Sustainability Report, PanAust stated while it had stopped “all mineral exploration activities” in Myanmar since the coup, it would continue to make financial payments in line with its statutory obligations, including maintaining tenement licences, tax obligations and administrative fees.
According to the company’s corporate income tax filings, Wuntho Resources Company Limited, which PanAust holds a 90 per cent interest in, paid the junta dead rent payments – annual permit costs – of $US287,000 ($436,369) in the year to September 2021, and $US150,000 in the six months to March 2022.
“These payments went to the military junta … and any revenue received by them can be used in its brutal campaign against the people of Myanmar,” Justice for Myanmar said in its report. “Also, payments of this kind can also send legitimacy to the illegal Myanmar military junta.”
PanAust said: “PanAust has decided to exit Myanmar and is in the process of withdrawing. We expect that this may take several months. In the meantime, our focus is on continuing to ensure the safety and wellbeing of our people on the ground in Myanmar.”
ALS Testing Services Company, the Myanmar-registered subsidiary of Australian Laboratory Services, has provided sample testing services to Myanmar-based mining company Access Asia Mining and two junta-controlled universities after the coup attempt, according to financial statements leaked to Justice for Myanmar.
Myanmar’s government in exile has designated the universities as restricted entities in an attempt to dissuade companies from doing business with them.
In a statement, ALS said none of its clients were subject to sanctions and it took its obligations to comply with the laws seriously. “As part of our process of continuing to meet these obligations, we have a due diligence process to screen and monitor clients in countries to which sanctions are applied, including Myanmar.”
Other companies operating in Myanmar include the Australian branch of the global consulting firm Knight Piesold. It has undertaken work on copper mines for the China-owned Wanbao Mining, a company that operates in partnership with Myanmar Economic Holdings, a conglomerate Australia sanctioned last year.
Knight Piesold managing director David Morgan told the activist group its work with the mining companies had been limited to preparing an environmental and social impact assessment. “At no time has it been involved, directly or indirectly, in what might be described as the physical act of mining, the extraction of minerals from the earth,” he said. The company did not respond to inquiries from this masthead.
Cornerstone Resources, which was Australian registered and one of the first foreign companies to receive a permit, meanwhile, has continued to mine and refine zinc in Shan state. It has traded with the Myanmar Economic Corporation, a military conglomerate, since the coup, according to leaked documents obtained by Justice for Myanmar.
Meanwhile, Access Asia Mining, which is registered in Singapore but has Australian shareholders, has been communicating with senior members of the junta to continue and expand its exploration operations under its wholly-owned Myanmar-incorporation subsidiary Access Resources Asia. The activist group cited a pro-junta media website reporting on the junta’s Shan State Minister of Natural Resources inspecting Access Resource Asia’s test drilling operations in May 2022, and published leaked documents showing Access Asia Mining procuring services in Myanmar in April 2022.
In its report, Justice for Myanmar said the encounter between the company and the junta-appointed minister legitimised the armed forces, undermined sanctions and, if production starts, created the risk that revenue could be funnelled to the junta.
The Albanese government sanctioned the Myanmar Economic Corporation and Myanmar Economic Holdings last year, as well as 16 military regime members, but so far, has resisted pressures to sanction Mining Enterprise No.1 and Mining Enterprise No.2, state-owned enterprises under junta control.
By highlighting the extent of Australian business in Myanmar, democracy activists are pleading with Australia to follow the United States, Canada, United Kingdom and European Union by imposing further sanctions.
“I was alarmed by the scale and the size of Australian activities in mining,” said Htwe Htwe Thein, an associate professor at Curtin University with 20 years of experience in business and economic development in Myanmar.
“If Australia had imposed sanctions on mining enterprises, this would not have happened. Sanctions send out a message that we don’t agree with what the junta is doing.
“These businesses aren’t doing anything illegal because Australia hasn’t sanctioned these entities, but companies have their own codes of conduct, their own commitments to human rights, labour and environmental laws, and they should be aware that they are working in a country under the violent military, which is under condemnation from the international community.”
Thein said mining companies couldn’t do business without directly or indirectly bankrolling funds to the military junta, which is heavily relying on the sector to pump up its coffers as international sanctions make it difficult for the armed forces to transact in foreign currencies.
Oil giant Woodside last year followed TotalEnergies and Chevron in deciding to formally withdraw from Myanmar following the coup, and exit its remaining petroleum exploration permits and contracts held with the Myanmar Oil and Gas Enterprise.
Myanmar scores 23/100 on Transparency International Australia’s corruption perceptions index, making it a “very risky place” for Australian-linked mining companies to do business, according to chief executive Clancy Moore.
Myanmar Campaign Network campaign manager Tasneem Roc is hoping smaller companies will follow suit.
“It’s not possible to have responsible business conduct in Myanmar given the egregious human rights violations,” Roc said. “Australia hasn’t issued sanctions [that go far enough], and that’s why these companies have been free to bolster the regime and continue to operate there because we’ve been so slow to issue sanctions.”
A Department of Foreign Affairs and Trade spokesman, responding on behalf of Foreign Minister Penny Wong’s office, said all Australian businesses operating internationally have a responsibility to respect human rights in their operations and supply chains.
“Australia does not promote Myanmar as a market for new entrants and continues to remind any existing investors of their obligations under Australian law,” the spokesman said.
”The Australian Government strongly condemns the ongoing repression and violence by the Myanmar regime. Australia supports ASEAN’s leadership in efforts to resolve the crisis. We urge the regime to end violence against civilians, engage in dialogue, release those unjustly detained, and allow safe and unimpeded access for humanitarian assistance.“
Opposition foreign affairs spokesman Simon Birmingham said it would be “deeply concerning” if the Australian government was not taking steps to understand the nature and impact of Australian investments in Myanmar.
“It is important that pressure continues to be applied to the military junta whose actions cause significant suffering for the people of Myanmar,” Birmingham said. “Australia should be urging all partners, including regional partners and nations with significant investments in Myanmar to act with similar conviction and principles to support the people of Myanmar.”
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